| This calculator will show
you how much you will save if you make 1/2 of
your loan payment every two weeks instead of making
a full loan payment once a month. In effect, you
will be making one extra loan payment per year
-- without hardly noticing the additional cash
outflow. But, as you're about to discover, you
will certainly notice the increased cash flow
that will occur when you pay your loan off well
ahead of schedule!
Caution: Most banks will only credit
payments once a month. The only time there are
exceptions is when someone has a true, blue
bi-weekly loan originated by a lender (they
are few and far between). Unless you are CERTAIN
that the bank will not screw things up with
those bi-weekly payments, we would not advise
you to go this way. Instead, we recommend that
you stick with your monthly payment schedule,
but each month when you send your regular payment,
include an additional amount equal to 1/12 of
one payment. Write a separate check for this
amount and designate it "Principal Prepayment."
They will accept the additional amount because
you are paying more than is required. They will
not refuse to accept it, nor will they charge
you a processing fee. At the end of a year you
will have made the equivalent of 13 monthly
payments (the same as 26 bi-weekly payments)
and the effect will be nearly the same as making
a one-half payment every two weeks.
Instructions: Enter your loan's principal
balance, monthly payment amount and annual interest
rate and then click on the "Compute" button.
Note: Other than decimal points, do not enter
any other non-numeric characters (commas, dollar
signs, etc.) in the middle two entry boxes.
Doing so will cause a JavaScript error.
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